Device Enhancement LLC. v. Amazon.com, Inc.

• Decision Date: 17 May 2016
• Docket Number: Civ. No. 15-762-SLR
• Citation: 189 F.Supp.3d 392
• Parties: Device Enhancement LLC., Plaintiff, v. Amazon.com, Inc., Defendant.
• Court: U.S. District Court — District of Delaware

189 F.Supp.3d 392

Device Enhancement LLC., Plaintiff,

v.Amazon.com, Inc., Defendant.

Civ. No. 15-762-SLR

United States District Court, D. Delaware.

Signed May 17, 2016

Brian E. Farnan, Esquire and Michael J. Farnan, Esquire of Farnan LLP, Wilmington, Delaware. Of Counsel: Paul A. Bondor, Esquire and Jeffrey S. Seddon, Esquire of Desmarais LLP, Counsel for Plaintiff.

Karen Jacobs, Esquire and Megan E. Dellinger, Esquire of Morris, Nichols, Arsht & Tunnell LLP, Wilmington, Delaware. Of Counsel: Adam K. Mortara, Esquire and Katherine L.l. Hacker, Esquire of Bartlit Beck Herman Palenchar & Scott LLP, Counsel for Plaintiff.

MEMORANDUM OPINION

ROBINSON, District Judge

I. INTRODUCTION

On August 31, 2015, plaintiff Device Enhancement LLC ("plaintiff") filed a complaint alleging infringement of U.S. Patent No. 7,747,683 ("the '683 patent") against defendant Amazon.com Inc. ("defendant"). (D.I. 1) Presently before the court is defendant's motion to dismiss. (D.I. 11) The court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a).

II. BACKGROUND

Plaintiff is a limited liability company organized and existing under the laws of the State of Delaware with its principal place of business in Ottawa, Canada. (D.I. 1 at ¶ 1) Defendant is a corporation organized and existing under the laws of the State of Delaware, with a place of business in Seattle, Washington. (D.I. 1 at ¶ 2) The '683 patent, titled "Method and System for Operating Applications for Remote Terminal Devices," was filed on December 28, 2006 and issued June 29, 2010.

III. STANDARD OF REVIEW

A motion filed under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a complaint's factual allegations.

Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Kost v. Kozakiewicz , 1 F.3d 176, 183 (3d Cir.1993). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Twombly , 550 U.S. at 545, 127 S.Ct. 1955 (internal quotation marks omitted) (interpreting Fed. R. Civ. P. 8(a) ). Consistent with the Supreme Court's rulings in Twombly and Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the Third Circuit requires a two-part analysis when reviewing a Rule 12(b)(6) motion. Edwards v. A.H. Corne ll & Son, Inc. , 610 F.3d 217, 219 (3d Cir.2010) ; Fowler v. UPMC Shadyside , 578 F.3d 203, 210 (3d Cir.2009). First, a court should separate the factual and legal elements of a claim, accepting the facts and disregarding the legal conclusions. Fowler , 578 F.3d at 210–11. Second, a court should determine whether the remaining well-pled facts sufficiently show that the plaintiff "has a ‘plausible claim for relief.’ " Id. at 211 (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ). As part of the analysis, a court must accept all well-pleaded factual allegations in the complaint as true, and view them in the light most favorable to the plaintiff. See Erickson v. Pardus , 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) ; Christopher v. Harbury , 536 U.S. 403, 406, 122 S.Ct. 2179, 153 L.Ed.2d 413 (2002) ; Phillips v. Cnty. of Allegheny , 515 F.3d 224, 231 (3d Cir.2008). In this regard, a court may consider the pleadings, public record, orders, exhibits attached to the complaint, and documents incorporated into the complaint by reference. Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) ; Oshiver v. Levin, Fishbein, Sedran & Berman , 38 F.3d 1380, 1384–85 n. 2 (3d Cir.1994).

The court's determination is not whether the non-moving party "will ultimately prevail" but whether that party is "entitled to offer evidence to support the claims." United States ex rel. Wilkins v. United Health Grp., Inc. , 659 F.3d 295, 302 (3d Cir.2011). This "does not impose a probability requirement at the pleading stage," but instead "simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of [the necessary element]." Phillips , 515 F.3d at 234 (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). The court's analysis is a context-specific task requiring the court "to draw on its judicial experience and common sense." Iqbal , 556 U.S. at 663–64, 129 S.Ct. 1937.

IV. DISCUSSION

A. 35 U.S.C. § 101

Section 101 provides that patentable subject matter extends to four broad categories, including: "new and useful process[es], machine[s], manufacture, or composition[s] of matter." 35 U.S.C. § 101 ; see also Bilski v. Kappos , 561 U.S. 593, 601, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010) (" Bilski II "); Diamond v. Chakrabarty , 447 U.S. 303, 308, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980). A "process" is statutorily defined as a "process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material." 35 U.S.C. § 100(b). The Supreme Court has explained:

A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. If new and useful, it is just as patentable as is a piece of machinery. In the language of the patent law, it is an art. The machinery pointed out as suitable to perform the process may or may not be new or patentable; whilst the process itself may be altogether new, and produce an entirely new result. The process requires that certain things should be done with certain substances, and in a certain order; but the tools to be used in doing this may be of secondary consequence.

Diamond v. Diehr , 450 U.S. 175, 182–83, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981) (internal quotations omitted).

The Supreme Court recognizes three "fundamental principle" exceptions to the Patent Act's subject matter eligibility requirements: "laws of nature, physical phenomena, and abstract ideas." Bilski II , 561 U.S. at 601, 130 S.Ct. 3218. In this regard, the Court has held that "[t]he concepts covered by these exceptions are ‘part of the storehouse of knowledge of all men ... free to all men and reserved exclusively to none.’ " Bi lski II , 561 U.S. at 602, 130 S.Ct. 3218 (quoting Funk Bros. Seed Co. v. Kalo Inoculant Co. , 333 U.S. 127, 130, 68 S.Ct. 440, 92 L.Ed. 588 (1948) ). "[T]he concern that drives this exclusionary principle is one of pre-emption," that is, " ‘that patent law not inhibit further discovery by improperly tying up the future use of’ these building blocks of human ingenuity." Alice Corp. Pty. Ltd. v. CLS Bank Int'l , ––– U.S. ––––, 134 S.Ct. 2347, 2354, 189 L.Ed.2d 296 (2014) (citing Bilski II , 561 U.S. at 611–12, 130 S.Ct. 3218 and Mayo Collaborative Servs. v. Prometheus Labs., Inc. , 566 U.S. 66, 132 S.Ct. 1289, 1301, 182 L.Ed.2d 321 (2012) ).

Although a fundamental principle cannot be patented, the Supreme Court has held that "an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection," so long as that application would not pre-empt substantially all uses of the fundamental principle. Bilski II , 561 U.S. at 611, 130 S.Ct. 3218 (quoting Diehr, 450 U.S. at 187, 101 S.Ct. 1048 ) (internal quotations omitted); In re Bilski , 545 F.3d 943, 954 (Fed.Cir.2008) (" Bilski I "). The Court has described the

framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts. If so, we then ask, "[w]hat else is there in the claims before us?" To answer that question, we consider the elements of each claim both individually and "as an ordered combination" to determine whether the additional elements "transform the nature of the claim" into a patent-eligible application. We have described step two of this analysis as a search for an " ‘inventive concept’ "—i.e., an element or combination of elements that is "sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself."

Alice , 134 S.Ct. at 2355 (citing Mayo, 132 S.Ct. at 1294, 1296–98 ).¹

"[T]o transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words ‘apply it.’ "

Mayo , 132 S.Ct. at 1294 (citing Gottschalk v. Benson , 409 U.S. 63, 71–72, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972) ) (emphasis omitted). It is insufficient to add steps which "consist of well-understood, routine, conventional activity" if such steps, "when viewed as a whole, add nothing significant beyond the sum of their parts taken separately." Mayo , 132 S.Ct. at 1298. "Purely ‘conventional or obvious' ‘[pre]-solution activity’ is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law." Id. (citations omitted). Also, the "prohibition against patenting abstract ideas ‘cannot be circumvented by attempting to limit the use of the formula to a particular technological environment’ or adding ‘insignificant post-solution activity.’ " Bilski II , 561 U.S. at 610–11, 130 S.Ct. 3218 (citation omitted). For instance, the "mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention." Alice , 134 S.Ct. at 2358. "Given the ubiquity of computers, wholly generic computer implementation is not generally the sort of ‘additional featur[e]’ that provides any ‘practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.’ " Id. (citations omitted).

The Federal Circuit has recently provided guidance on step one of the Alice inquiry. Significantly, the Court in Enfish, LLC v. Microsoft...